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  • MF News Direct investors overtake distributors in equity gross sales

    Direct investors overtake distributors in equity gross sales

    The MF industry has recorded gross sales of Rs.42,800 crore in equity funds through direct channel which is higher than gross sales of distributors in equity funds.
    Nishant Patnaik Sep 22, 2017

    After debt funds, equity funds have been receiving healthy inflows through direct plans. CAMS data that covers 94% of industry shows that the mutual fund industry has recorded gross sales of Rs.42,800 crore in equity funds through direct plans between January and June 2017.

    CAMS collates data from other R&T agents such as Karvy Computershare, Franklin Templeton and Sundaram BNP Paribas to make this report.

    On the other hand, the industry has witnessed gross sales of Rs.35,322 crore in equity funds through individual distributors in the first half of 2017.

    While direct plan account for 24% of gross sales in equity funds, the IFA channel contributed 20% in the equity gross sales in the first six month of the current calendar year.

    Swarup Mohanty, CEO, Mirae Asset MF attributes this to participation of institutional investors in equity through arbitrage funds. “Direct plans have three broad categories – direct retail, direct institutional and direct RIA. A lot of action has been happening in direct institutional and direct RIAs. While many large institutional investors invest in arbitrage funds through direct plans, many RIAs have been recommending their clients to invest in mutual funds through direct plans. However, in my view, gross sales in direct retail is still marginal.”

    Gross sales in arbitrage funds during April-August is Rs.30,083 crore. In FY 2016-17, arbitrage funds had received gross sales of Rs.60,464 crore.

    However, if we include all the distribution channels such as individual distributors, national distributors, banks and others (robo advisors and overseas distributors), the industry has recorded gross sales of Rs.1.33 lakh crore in equity funds.

    Among distribution channels, IFAs top the charts with Rs.35,322 crore gross sales in equity funds. Private banks followed IFAs with gross sales of Rs.35,279 crore in equity funds.

    In addition, national distributors recorded gross sales of Rs.26,751 crore in equity funds. Many individual distributors work with NDs like NJ India and Prudent under sub-broking model. The data shows that both - IFAs and NDs account for 38% (20% and 15% respectively) of gross equity sales.

    In terms of geographical distribution of gross sales, IFAs recorded highest gross sales in both T15 and B15 cities among distribution channels. 

    Source: CAMS

     

    Distributor Type

    Gross equity sales

    IFAs

    35,322

    NDs

    26,751

    Regional distributors

    4,616

    PSU Banks

    6,219

    Other banks

    35,279

    Direct

    42,800

    Other

    24,257

    Total

    1,75,369

     

     

    Source: CAMS

    Figures in Rs.crore

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    16 Comments
    Prashant · 6 years ago `
    The article and the heading does not coincide at all. Please do not misguide people by bombarding with the malafide headings.
    sHAILESH SAMPAT · 6 years ago
    Dear Prashant don't be an ostrich who hide the face and think that there is no problem. This is a fact you can see the figs and think over it with cool mind. We should accept the reality and try to find the cause of the situation.

    As far as my thinking Investors are only concern with returns not relations. The are forced to invest directly just because of the difference in NAVs, even though this is the misguiding figs, if you calculate it in terms of annualised returns it will be lower than or equal to only 1% but if you see as of to day it will be more than 4% which attract the investors to invest directly.

    If you really want to come out of it you should think out of the box.

    What we are doing is selling too much SIPs for which what is our marketing speech? We are pitching is higher returns with easiness of the SIPs which is understood by investor and encourage them to invest in direct funds to generate even more returns. We hardly pitch market risk understanding. We are also not concern with downfall of the market while selling SIPs.

    You can also see that we are very aggressive while upward moving trends for selling SIPs and try to find hideouts while downfall trends because we do not have any answer to investors why valuation of their investment goes down? When investor ask we are telling that it is due to Market Downfall. My question is why investors hiring us? If you find the answer to this question you will find the solution in the answer it self.

    What we should do to overcome this we should develop our own mechanism which generates Higher Returns along with safety of the clients money. Client should realise the IFA's requirement then and only then Investor will come back and sustain with you.

    FOR THIS WE SHOULD CHANGE OUR WORKING PATTERN AND WAY OF THINKING.

    DON'T SELL SIPs JUST TO BE ELEGIBLE IN THE CONTEST. TRY TO DEVELOP YOUR OWN THEORY WHICH IS NOT DEPENDENT ON MARKET, IF YOU CAN NOT THEN HIRE THIRD PARTY TOOLS WHICH CAN NOT BE USED DIRECTLY BY INVESTOR AND HAVING POTENTIAL TO GENERATE HIGHER RETURNS AND MAINTAIN CAPITAL SAFETY ALSO. DON'T JUST AVOID ANY GOOD THINGS BECAUSE IT INVOLVES MANUAL FUNCTION LIKE SWITCHES.

    IF YOU WANT YOUR INVESTORS TO BE UNDER YOUR ARN FOR EVER THEN GIVE THEM HIGHER RETURNS, CAPITAL SAFETY THEN SIP IN DIRECT PLAN. AND OFCOURSE LET THEM FEEL THAT YOUR INVOLVEMENT IS THERE WHICH IS NOT POSSIBLE IN SIPs AND STPs DONE IN DIRECT PLANS.

    IF WE DO NOT CHANGE OURSELF WE WILL NOT SURVIVE. BEST EXAMPLE FOR THIS IS WHEN COMPUTORS CAME AND BECOME CHEAPER WHAT HAPPEND TO AN ACCOUNTANTS WHO DID NOT CHANGE THEIRSELF THEY HAD LOST THEIR JOB AGAINST NEW TECHNOLGY. HERE TECHNOLOGY IS NOT CULPRIT BECAUSE TECHNOLOGY HAS GENERATED SO MANY NEW EMPLOYMENT. SAME THING APPLIED HERE IF YOU DON'T CHANGE YOURSELF YOU WILL BE OUT OF THE FIELD.

    NOW THE CHOICE IS YOUR.
    Reply
    Balakrishnan · 6 years ago `
    Direct only 42800 crore
    you missed National distributors,Banks & Regional distributors
    Retail investors prefers IFA only
    Amit · 6 years ago `
    Shailesh Sampat ji, I agree with you completely. Please throw some light on your statement when you say "we should develop our own mechanism which generates Higher Returns along with safety of the clients money". Please guide everybody.!

    SHAILESH SAMPAT · 6 years ago
    Amitji I have developed my own Investment Mechanism which is generating higher returns with capital safety.

    In Back Testing from Jun 2000 to Aug 2017 in HDFC CMF-TAP and HDFC Equity combination STP Generate 90,00,000 after investment of ? 10,00,000 while in my mechanism it generated 1,02,68,000 after investing only ? 2,50,000. which is higher by 5% Compounded in 17 year period.

    While generating Back Testing all the transactions were made on same day with same NAVs but with different amount which is derived by my formulae. What I do is managing the risk only which turns in to the higher returns with highest safety. At bottom of the market in march 2009 we were above at par means Gainers. for more details pl share your mail id so I can send you more details.

    Today my mechanism is managing more than 1000 Cr across the industry by so many distributors
    Puneet Gakhreja · 6 years ago
    Dear Shailesh Sampat ji,

    Really impressed with the confidence u have shown in the mechanism you are following..It would be great if you can share some insights on the same at my email id which is puneetgakhreja@gmail.com...
    Nandlal · 6 years ago
    Dear Sampat ji

    I am impressed with you idea and method.

    Please share your idea and methods you are applying in investing.

    My family and client would benefited with your idea to enhance the return and safety for investment.

    My email I'd -
    nandlalkiran@gmail.com
    nandlalkiran@rediffmail.com
    Reply
    jayprakash · 6 years ago `
    Don't worry there is one another investment scheme is available in market, that will finish this direct as well as regular scheme, may be it will take time.
    Prashant · 6 years ago
    Which scheme you are talking about sir?
    Goutam Agarwala · 6 years ago
    goutamraiganj@yahoo.co.in and goutamraiganj@gmail.com
    Reply
    Goutam Agarwala · 6 years ago `
    Sampatjee Please share it in my mail goutamraiganj@yahoo.co.in and goutamraiganj@gmail.com
    Dipanjan Dutta · 6 years ago `
    Sampatjee Please share it in my mail id dipanjandutta72@gmail.com
    vivek · 6 years ago `
    Sampat sir please share ur investment formula details on my email I'd. vkb_1947@yahoo.in because I want my client capital saftey
    swapnil · 6 years ago `
    Dear Shailesh Sampat ji,
    Im interested in knowing your mechanism, please share on mail sd87swtdrm@gmail.com
    Shobhna · 6 years ago `
    Shailesh sir please share your investment formula on my E mail ID
    sjpunjani@yahoo.co.in .l m also MF distributor.
    Shobhna · 6 years ago `
    Shailesh sir please share your investment formula on my E mail ID
    sjpunjani@yahoo.co.in .l m also MF distributor.
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